exv10w1



 





Exhibit 10.1




EMPLOYMENT AND COOPERATION AGREEMENT



     THIS AGREEMENT, made and entered into as of December 7, 2004 (the “Effective Date”), by and
between David M. Edwards (the “Executive”) and GATX Financial Corporation (the “Company”);



WITNESSETH THAT:



     WHEREAS, the parties desire to enter into this Agreement pertaining to the continued
employment of the Executive by the Company through December 31, 2004; and



     WHEREAS, the Executive possesses certain specialized knowledge and experience which will be of
benefit to the Company following the termination of the Executive’s employment, and the Executive
is willing to continue to share such knowledge and experience with the Company under the terms and
conditions set forth herein.



     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, it is
hereby covenanted and agreed by the Executive and the Company as follows:



     1. Employment Period. Subject to the terms of this Agreement, the Company hereby
agrees to employ the Executive, and the Executive hereby agrees to remain in the employ of the
Company during the Employment Period. The “Employment Period” shall be the period beginning on the
Effective Date and ending December 31, 2004, (the “Employment Termination Date”). The Executive’s
employment will terminate on the Employment Termination Date.



     2. Performance of Duties. The Executive agrees that during the Employment Period he
shall perform such services for the Company and the Affiliates as are necessary and appropriate for
a smooth transition of the Executive’s responsibilities, and he shall devote his full time,
energies and talents to serving the Company. For purposes of this Agreement, the term “Affiliate”
means any company during any period in which it owns at least fifty percent of the voting power of
all classes of stock of the Company entitled to vote, and any company during any period in which at
least fifty percent of the voting power of all classes entitled to vote is owned, directly or
indirectly, by the Company or by any other company that is a Affiliate by reason of its direct or
indirect ownership of stock of the Company.



     3. Compensation. Subject to the terms of this Agreement, during the Employment Period,
the Executive shall receive salary at the rate in effect immediately prior to the Effective Date,
and shall be eligible for the benefits consistent with his position in the Company.



     4. Advice and Consultation. From time to time on or before December 31, 2005, and
subject to the terms of this Agreement, the Company may call upon the Executive for, and the
Executive shall provide, advice and consultation with respect to matters relating to the business
and operations of the Company’s Rail division on which the Executive may have worked or with
respect to which the Executive would otherwise have expertise or knowledge. Following the
Employment Termination Date and until such time as the Executive procures full time employment,
such advice and consultation shall be rendered on an as required basis; thereafter



 









 






such advice and consultation shall be rendered by the Executive at such times and in such
manner so as to not interfere with the Executive’s employment responsibilities.



     5. Payment on or After Termination of Employment. The Executive’s compensation during
the Employment Period shall be subject to the following:




	(a)	 	The Executive shall be entitled to a lump sum cash payment of $820,000 on the Employment
Termination Date.
	 
	(b)	 	The Executive shall receive his 2004 bonus at essentially the same time as payments are
distributed generally under the 2004 Bonus Program. The executive shall be treated no
differently than other participating GATX Rail executives in the assessment of the achievement
of the Company’s performance against pre-established goals under the 2004 Bonus Program.
	 
	(c)	 	Options previously granted to the Executive by the Company shall be subject to the following:





	 	(i)	 	The options listed on Exhibit A may be exercised on or before the dates set
opposite each respective option grant date on exhibit A.
	 
	 	(ii)	 	The Executive may exercise options granted to him that are not listed in
Exhibit A on or before March 31, 2005, being ninety (90) days from the Employment
Termination Date.
	 
	 	(iii)	 	Options purchased by the Executive under the terms of the Employee Option
Purchase Program may be exercised by the Executive according to their terms on or
before January 28, 2010.
	 
	 	(iv)	 	The option granted to the Executive on August 6, 2004 shall vest and become
exercisable with respect to one-half of the shares covered by that option grant on
August 6, 2005, and as of the Employment Termination Date the option shall be canceled
with respect to the remaining one-half of the shares.
	 
	 	(v)	 	Except as specifically provided to the contrary herein, all options shall
remain subject to the terms and conditions of the option plan and agreement pursuant to
which they were issued, including the special acceleration provisions thereof.





	(d)	 	The Executive was granted an award of 7520 restricted stock units effective January 1, 2004.
On the date of the Company’s Compensation Committee’s (the “Committee”) determination in 2005,
the Executive shall be vested in the number of shares of restricted stock (“Restricted Stock”)
under that award equal to the product of (a) the number of shares of Restricted Stock that
would have vested based on actual performance through December 31, 2004, as determined by the
Committee and (b) 27/36, a fraction that reflects the pro rata reduction that would have
otherwise occurred if the Executive had remained employed by the Company until April 14, 2006.
The executive shall be treated no differently than other participating GATX Rail executives
in the assessment of the achievement of the Company’s performance against pre-established
goals under the




 









 









	 	 	restricted stock program. The restrictions shall lapse on the Executive’s shares of
Restricted Stock coincidentally with the vesting thereof on the date of the Committee’s
determination as set forth in the first sentence of this subparagraph, and the unrestricted shares shall be distributed as soon as practical thereafter.
	 
	(e)	 	The Executive shall receive additional benefits such that the Executive’s aggregate benefits
under the Excess Benefit Plan and Supplemental Retirement Plan maintained by GATX Corporation,
when added to the Executive’s benefit under the GATX Corporation Non-Contributory Pension Plan
for Salaried Employees (the “Qualified Plan”), shall equal the aggregate benefit the Executive
would have received under those plans if the Executive accrued Service Credit (as that term is
defined in the Qualified Plan) as though he remained in the employ of the Company until April
14, 2006.
	 
	(f)	 	During the period beginning on the Effective Date and ending on April 14, 2006, the Executive
and his eligible dependents shall be eligible to participate in the Company’s healthcare plan
as though the Executive continued to be employed by the Company during that period, but
subject to his making the premium payments for such coverage otherwise required of employees
of the Company from time to time. As of April 14, 2006, the Executive’s eligibility for
coverage under the Company’s retiree healthcare benefit program shall be determined as though
the Executive continued to be employed by the Company through April 14, 2006.
	 
	(g)	 	The Company shall reimburse the Executive for expenses incurred by him for office space,
secretarial assistance, and other costs incurred by him to assist him in the transition to new
employment, provided that the amount of reimbursement under this paragraph (f) that shall not
exceed $40,000.
	 
	(h)	 	Except as otherwise specifically provided in this Agreement, the amounts payable under this
paragraph 5 shall be in lieu of any benefits that may be otherwise payable to or on behalf of
the Executive pursuant to the terms of any severance pay arrangement of the Company or any
Affiliate or any other, similar arrangement of the Company or any Affiliate providing benefits
upon involuntary termination of employment (including, without limitation the GATX Corporation
Severance Benefit Plan).
	 
	(i)	 	In no event shall the Executive be entitled to receive any amounts, rights, or benefits under
this paragraph 5 unless he executes a release of claims against the Company and affiliated
persons in a form attached hereto as Exhibit B after his Employment Termination Date, and the
revocation period for the release has expired and such release has not been revoked.
	 
	(j)	 	If the Executive breaches any of the requirements of paragraph 7, then (i) he shall forfeit a
right to receive any amounts under this Agreement that were not paid prior to the date of such
breach; (ii) he shall forfeit the right to receive benefits under this Agreement which will
vest or to which the Executive would otherwise become entitled at a date subsequent to the
date of such breach, (iii) he shall forfeit any options that have not been exercised prior to
the date of the breach; and (iv) he shall forfeit any restricted stock that has not vested
prior to the date of the breach. The Executive acknowledges and agrees








 









 










	 	 	that the remedies provided under this paragraph (j) shall be in addition to other remedies
for breach of this Agreement. For the avoidance of doubt, nothing in this subparagraph (j)
shall apply to any benefit in which the Executive has a vested interest.
	 
	(k)	 	Notwithstanding any provision contained therein, the Agreement for Employment Following a
Change of Control by and between GATX Corporation and the Executive, dated as of August 6,
2004, shall be terminated and of no further force or effect as of December 31, 2004.




     6. Confidential Information. Except as may be required by the lawful order of a court
or agency of competent jurisdiction, the Executive agrees to keep secret and confidential
indefinitely all non-public information concerning the Company and the Affiliates which was
acquired by or disclosed to the Executive during the course of his employment with the Company, and
not to disclose the same, either directly or indirectly, to any other person, firm, or business
entity, or to use it in any way. To the extent that the Executive obtains information on behalf of
the Company or any of the Affiliates that may be subject to attorney-client privilege as to the
Company’s attorneys, the Executive shall take reasonable steps to maintain the confidentiality of
such information and to preserve such privilege. Nothing in the foregoing provisions of this
paragraph 6 shall be construed so as to prevent the Executive from using, in connection with his
employment for himself or an employer other than the Company or any of the Affiliates, knowledge
which was acquired by him during the course of his employment with the Company and the Affiliates,
and which is generally known to persons of his experience in other companies in the same industry.



     7. Restriction on Competition and Solicitation. The Executive agrees to the following:




	(a)	 	The Executive agrees that for the period beginning on the Effective Date and ending on
December 31, 2005, he will not take any actions to assist any third party in recruiting any
then currently active employee of the Company or any Affiliate. The Executive understands
that such actions that are prohibited shall include, but will not be limited to: (i)
identifying to a successor employer or its agents person or persons who have special knowledge
of the Company’s processes, methods or confidential affairs; (ii) commenting to a successor
employer or its agents about the quantity of work, quality of work, special knowledge, or
personal characteristics of any person who is still employed by the Company or its Affiliates;
or (iii) facilitating contact or communication with such currently active employee.
	 
	(b)	 	The Executive agrees that for the period beginning on the Effective Date and ending on
December 31, 2006 the Executive shall not, without the express written consent of the Board of
Directors of the Company, be employed by, serve as a consultant to, or otherwise assist or
directly or indirectly provide services to a Competitor (defined below) if: (i) the services
that the Executive is to provide to the Competitor are the same as, or substantially similar
to, any of the services that the Executive provided to the Company or the Affiliates within
the three years immediately preceding the Effective Date; or (ii) any trade secrets,
confidential information, or proprietary information (including, without limitation,
confidential or proprietary methods) of the Company and the Affiliates to which the Executive
had access could reasonably be expected to benefit the Competitor if








 









 










	 	 	the Competitor were to obtain access to such secrets or information. The term “Competitor”
shall mean any company engaged in leasing rail equipment such as tank cars, freight cars or
locomotives either on a full-service or net lease basis as of the date hereof, including
those companies which the Company has specifically identified as its primary competitors in
its periodic filings with the Securities and Exchange Commission. For the avoidance of
doubt, nothing herein shall preclude the Executive from procuring employment with or serving
as a consultant to a parent or sister company, division or business segment of a Competitor,
provided that the Executive’s principal and primary employment or consulting
responsibilities would not constitute a violation of the first sentence hereof, and the
responsibilities, if any, of the Executive to the business or operations of a Competitor are
only incidental.




     8. Remedies. The Executive acknowledges that the Company and/or the Affiliates would
be irreparably injured by a violation of paragraphs 6 and 7 and he agrees that the Company and/or
the Affiliates, in addition to any other remedies available to them for such breach or threatened
breach, shall be entitled to a preliminary injunction, temporary restraining order, or other
equivalent relief, restraining the Executive from any actual or threatened breach of paragraphs 6
and 7. If a bond is required to be posted in order for the Company and/or the Affiliates to secure
an injunction or other equitable remedy, the parties agree that said bond need not be more than a
nominal sum.



     9. Amendment. This Agreement may be amended or cancelled only by mutual agreement of
the parties in writing without the consent of any other person. So long as the Executive lives, no
person, other than the parties hereto, shall have any rights under or interest in this Agreement or
the subject matter hereof.



     10. Applicable Law. The provisions of this Agreement shall be construed in accordance
with the laws of the State of Illinois, without regard to the conflict of law provisions of any
state. All disputes between the parties hereto relating to this Agreement shall be litigated in
Illinois.



     11. Severability. The invalidity or unenforceability of any provision of this
Agreement will not affect the validity or enforceability of any other provision of this Agreement,
and this Agreement will be construed as if such invalid or unenforceable provision were omitted
(but only to the extent that such provision cannot be appropriately reformed or modified).



     12. Waiver of Breach. No waiver by any party hereto of a breach of any provision of
this Agreement by any other party, or of compliance with any condition or provision of this
Agreement to be performed by such other party, will operate or be construed as a waiver of any
subsequent breach by such other party or any similar or dissimilar provisions and conditions at the
same or any prior or subsequent time. The failure of any party hereto to take any action by reason
of such breach will not deprive such party of the right to take action at any time while such
breach continues.



     13. Successors. This Agreement shall be binding upon, and inure to the benefit of, the
Company and its successors and assigns and upon any person acquiring, whether by merger,
consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets
and business.



 









 





     14. Entire Agreement. Except as otherwise noted herein, this Agreement constitutes the
entire agreement between the parties concerning the subject matter hereof and supersedes all prior
and contemporaneous agreements between the parties relating to the subject matter hereof. Except
as otherwise expressly provided in this Agreement, nothing in this Agreement shall adversely affect
the rights earned by the Executive during his employment with the Company with respect to any
benefit plan maintained by the Company to the extent provided in accordance with the terms of the
applicable plan.



     IN WITNESS THEREOF, the Executive has hereunto set his hand, and the Company has caused these
presents to be executed in its name and on its behalf, as of the Effective Date.


	 	 	 	 	 
	 	 	 
	 	           /s/ David M. Edwards
 	 
	 	David M. Edwards 	 
	 	 	 
	 
	 	GATX Financial Corporation

 	 
	 	By:  	/s/ Ronald H. Zech
 	 
	 	 	Ronald H. Zech 	 
	 	Its:	            Chairman and Chief Executive Officer 	 
	 








 










 









EXHIBIT A

STOCK AWARDS



     The Executive shall be treated as though his Employment Termination Date is by reason of
Retirement for purposes of determining the period during which the options described below may be
exercised after termination of employment in accordance with paragraph 5(b) of the Employment and
Consulting Agreement (to which this Exhibit A is attached):



	 	 	 	 	 	 	 	 	 	 	 
	Date of Option	 	Number of	 	Option Exercise	 	Last Exercise
	Grant
	 	Options Granted
	 	Price
	 	Date

	October 24, 1997

	 	 	19,000	 	 	$	33.4688	 	 	October 24, 2007
	July 24, 1998

	 	 	15,000	 	 	$	39.7188	 	 	July 24, 2008
	July 23, 1999

	 	 	16,000	 	 	$	39.4688	 	 	July 23, 2009
	October 22, 1999

	 	 	15,000	 	 	$	30.7813	 	 	October 22, 2009
	January 28, 2000*

	 	 	3,185	 	 	$	28.6875	 	 	January 28, 2010
	March 10, 2000

	 	 	31,000	 	 	$	30.4688	 	 	December 31, 2009
	July 27, 2001

	 	 	25,000	 	 	$	39.1450	 	 	December 31, 2009
	April 26, 2002

	 	 	20,000	 	 	$	31.7350	 	 	December 31, 2009
	July 26, 2002

	 	 	20,000	 	 	$	24.1700	 	 	December 31, 2009
	August 6, 2004 **

	 	 	14,300	 	 	$	24.3650	 	 	December 31, 2009







* Options purchased under the Employee Option Purchase Program



** The option granted
to the Executive on August 6, 2004 shall vest and become exercisable with respect to one-half of
the shares covered by that option grant on August 6, 2005, and as of the Employment Termination
Date the option shall be canceled with respect to the remaining one-half of the shares.




 









 





EXHIBIT B

GENERAL WAIVER AND RELEASE AGREEMENT



     I, David M. Edwards, understand and agree completely to the terms set forth in the attached
Employment and Consulting Agreement (the “Employment and Consulting Agreement”).



     In consideration of benefits I will receive under the Employment and Consulting Agreement, I
hereby release, acquit and forever discharge GATX Corporation, its parents and subsidiaries
(collectively, the “Company”), and their respective officers, directors, agents, servants,
employees, attorneys, shareholders, fiduciaries of employee benefit plans, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys’ fees, damages, indemnities and obligations of every kind and nature, in law,
equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed,
arising out of or in any way related to agreements, events, acts or conduct at any time prior to
and including the date I sign this General Waiver and Release Agreement (the “Agreement”),
including, but not limited to: any and all such claims and demands directly or indirectly arising
out of or in any way connected with my employment with the Company or the termination of that
employment, including, but not limited to, claims of intentional and negligent infliction of
emotional distress, any and all tort claims for personal injury, claims or demands related to
salary, bonuses, commissions, stock, stock options, or any other ownership or equity interests in
the Company, vacation pay, personal time off, fringe benefits, expense reimbursements, sabbatical
benefits, severance benefits, or any other form of compensation; provided however this shall not
apply to any employee benefit in which the employee has a vested interest; claims pursuant to any
federal, any state or any local law, statute, common law or cause of action including, but not
limited to, the federal Civil Rights Act of 1964, as amended; attorneys’ fees under Title VII of
the federal Civil Rights Act of 1964, as amended, or any other statute, agreement or source of law;
the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”); the federal
Americans with Disabilities Act of 1990; the Family and Medical Leave Act; the Employee Retirement
Income Security Act; the Equal Pay Act; any state or local anti-discrimination law, any state wage
payment law, any other state or local law, ordinance or regulation relating to any aspect of
employment; tort law; contract law; or the law of wrongful discharge, discrimination, harassment,
fraud, misrepresentation, defamation, libel, emotional distress, and breach of the implied covenant
of good faith and fair dealing.



     I represent that I have no lawsuits, claims or actions pending in my name, or on behalf of any
other person or entity, against the Company or any other person or entity subject to the release
granted in this Agreement. I agree that in the event I bring a claim covered by this release in
which I seek damages against the Company or in the event I seek to recover against the
Company in any claim brought by a governmental agency on my behalf, this Agreement shall serve
as a complete defense to such claims.



 









 





     I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have
under ADEA. I also acknowledge that the consideration given for the waiver and release in the
preceding paragraph hereof is in addition to anything of value to which I was already entitled. I
further acknowledge that I have been advised by this writing, as required by the ADEA, that:
(a) my waiver and release do not apply to any rights or claims that may arise after the
execution date of this Agreement; (b) I have been advised hereby that I have the right to
consult with an attorney prior to executing this Agreement; (c) I have twenty-one (21)
days from the date I receive this Agreement to consider this Agreement (although I voluntarily may
choose to execute this Agreement earlier); (d) I have seven (7) days following the
execution of this Agreement to revoke this Agreement; and (e) this Agreement shall not be
effective until the later of (i) the date upon which the revocation period has expired, which shall
be the eighth (8th) day after I execute this Agreement, or (ii) the date I return this
Agreement, fully executed, to the Company.



     I acknowledge that I have read and understand Section 1542 of the California Civil Code which
reads as follows: “A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.” I hereby expressly waive and relinquish all
rights and benefits under that section and any law of any jurisdiction of similar effect with
respect to my release of any unknown or unsuspected claims I may have against the Company, its
affiliates, and the entities and persons specified above.



	 	 	 	 	 	 	 
	Employee	 	GATX FINANCIAL CORPORATION
	 	 	 	 	 	 	 
	Sign:	 	


	 	Name:
	 	Ronald H. Zech
	 	 	 	 	 	 	 
	Date:	 	


	 	Sign:
	 	


	 	 	 	 	 	 	 
	 	 	 	 	Date: